SoftBrands (SBN)

Goodwill
and Other Intangible Assets, the Company tests goodwill for
impairment on at least an annual basis. In
accordance with SFAS

51

No. 142,
the Company evaluates the carrying value of goodwill at the end of its fiscal
year and between annual evaluations if events occur or circumstances change
that would more likely than not reduce the fair value of the reporting unit
below its carrying amount. Such
circumstances could include, but are not limited to, (1) a significant
adverse change in legal factors or in business climate, (2) unanticipated
competition, or (3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired,
the Company compares the fair value of the reporting unit to which the goodwill
is assigned to its carrying amount, including goodwill. If the carrying amount of a reporting unit
exceeds its fair value, then the amount of the impairment loss must be
measured. The impairment loss would be
calculated by comparing the implied fair value of reporting unit goodwill to
its carrying amount. In calculating the
implied fair value of goodwill, the fair value of the reporting unit is
allocated to all of the other assets and liabilities of that unit based on
their fair values. The excess of the
fair value of a reporting unit over the amount assigned to its other assets and
liabilities is the implied fair value of goodwill. An impairment loss would be recognized when
the carrying amount of goodwill exceeds its implied fair value. The Companys September 30, 2005, 2004
and 2003 assessments of goodwill in accordance with SFAS No. 142 resulted
in no impairment losses.